Fremont Assistant City Attorney Joan Borger takes a picture of her colleague Fremont City Council Member Sue Chan next to the new Tesla Model S during a tour of the facility on Wednesday, October 27, 2010 in Fremont, Calif. Tesla Motors CEO Elon Musk announced that the facility should be operational within 18 months.

With one wave of his hand, Elon Musk, the CEO of electric-car startup Tesla, breathed new life into the former Nummi auto manufacturing plant in Fremont, shuttered since General Motors and Toyota walked away from the factory in the last year.

"Well, we have a very large sign and we're going to raise the curtain now," he told a crowd of reporters, politicians and employees Wednesday. "This may take a while."

As he gestured toward the factory behind him, workers struggled to remove several large tarps that covered a huge Tesla sign on the side of the building.

That sign, now visible from nearby Interstate 880, is a sign of what is to come, said Sen. Dianne Feinstein, D-Calif.

"This factory marks the dawning of a new day for manufacturing in Fremont and the East Bay," she said. "This is proof of what's possible in California," she added.

Within 12 to 18 months, the company expects to begin producing 7,000 new Model S all-electric luxury sedans each year with 500 workers, including a number of former Nummi employees.

Eighty percent of the 5.5 million-square-foot plant will remain closed until demand for the electric car grows, said Gilbert Passin, Tesla's vice president of manufacturing.

The company eventually hopes to employ 5,000 people, Musk said.

Tesla paid $42 million for the factory - formerly operated by New United Motors Manufacturing Inc. - in May. Nummi once employed 5,500 union autoworkers and had the capacity to turn out half a million gas-powered autos each year.